Do this before 15th March to avoid penalty! #shorts

Advance tax involves paying taxes in advance based on your estimated annual tax liability through four quarterly instalments.

If your estimated annual tax liability exceeds ₹10,000, you're required to pay advance tax, considering all income sources and any TDS deductions.

Failure to pay advance tax on time incurs a monthly interest penalty of 1% according to sections 234B and/or 234C of the Income Tax Act.

How is advance tax calculated?

- Calculate your total annual income.
- Deduct the total amount of allowable deductions.
- Determine your tax liability using the selected tax regime and the most recent slab rates (special rates in the case of capital gains).
- If your tax liability is over ₹10,000, you must adhere to the advance tax regulations.

Instalments of advance tax:

- 1st quarter due date - 15th June (15% of the tax liablity)
- 2nd quarter due date - 15th September (45% of the tax liability)
- 3rd quarter due date - 15th December (75% of the tax liability)
- 4th quarter due date - 15th March (100% of the tax liability)

Here are some exceptions:

- People who receive salary income that is covered under TDS net are exempt from paying advance tax. All income, however, including capital gains, rent, interest, and non-salary income, is subject to advance tax.

- Residents who are 60 years of age or older and do not have income falling under the category of "Income from Business & Profession" are exempted from paying advance tax.

- You may pay the advance tax in one instalment by no later than March 15th of the relevant year if you have chosen to use the presumptive taxation system.

- Advance tax must be paid on an accrual basis in the case of capital gains.
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